Internet wagering under attack

WASHINGTON — Gamblers who prefer their laptops to blackjack tables won’t like what Congress is doing.

On Tuesday, the House plans to vote on a bill that would ban credit cards for paying online bets and could padlock gambling Web sites.
The legislation would clarify existing law to spell out that it is illegal to gamble online.

To enforce that ban, the bill would prohibit credit cards and other payment forms, such as electronic transfers, from being used to settle online wagers. It also would give law enforcement officials the authority to work with Internet providers to block access to gambling Web sites.

Some opponents of the legislation say policing the Internet is impossible, that it would be better to regulate the $12 billion industry and collect taxes from it. The online gambling industry is based almost entirely outside the United States, though about half its customers live in the U.S.

Other critics complain that the bill doesn’t cover all forms of gambling.
They point to exemptions they say would allow online lotteries and Internet betting on horse racing to flourish while cracking down on other kinds of sports betting, casino games and card games like poker.

“If you’re going to support legislation that is supposed to ’prohibit gambling,’ you should not have carve-outs,” said Andrea Lafferty, executive director of the conservative Traditional Values Coalition.

Other conservative and antigambling groups are supporting the legislation, sponsored by Reps. Bob Goodlatte, R-Va., and Jim Leach, R-Iowa.

John Kindt, a business professor at the University of Illinois at Urbana-Champaign who has studied the issue, calls the Internet “the crack cocaine” of gambling.

“There are no needle marks. There’s no alcohol on the breath. You just click the mouse and lose your house,” he said.

Congress has considered similar bills several times before. In 2000, disgraced lobbyist Jack Ambramoff led a fierce campaign against it on behalf of an online lottery company.

Online lotteries are allowed in the latest bill, largely at the behest of states that increasingly rely on lotteries to augment tax revenues.
Pro-sports leagues also like the bill, arguing that Web wagering could hurt the integrity of their sports.

The horse racing industry also supports the bill because of the exemption it would get. Betting operators would not be prohibited from any activity allowed under the Interstate Horseracing Act. That law written in the 1970s set up rules for interstate betting on racing. It was updated a few years ago to clarify that betting on horse racing over the Internet is allowed.

Greg Avioli, chief executive officer of the National Thoroughbred Racing Association, said the mention of horse racing in the bill is “a recognition of existing federal law,” not a new carve-out.

He said the racing industry has a strong future in the digital age and acknowledged the bill would send Internet gamblers to racing sites. “They’d return to the one place they can bet legally,” Avioli said.